2 ms·
I read the article in its entirety. While what they propose (a very small fractional increase in taxes among the middle class) is entirely plausible, it misses
by nightski 12y ago
I read the article in its entirety. While what they propose (a very small fractional increase in taxes among the middle class) is entirely plausible, it misses the point entirely.
A consumption tax is optional. Meaning I only pay that tax if I consume above a poverty level. An income tax however is not. If I earn an income, I pay the tax.
The reason this is such a big deal is that it empowers the individual to change their financial situation. For example my taxes may decrease by 50% under FairTax, simply because I live a simple life style.
If someone chooses to improve their situation, they can take all the extra money, save, invest without capital gains, and see the turnaround much quicker.
This is in contrast to today's system which penalizes saving & investment and HEAVILY penalizes those who go out and start a business (I pay quite a bit more tax as a self employed individual).
It is also much more logical to be penalized for consumption vs. contributing to society (similar to the OP).